The invention relates to event outcome prediction systems, and more specifically to a system and method for predicting and indicating results of chance events over a user-selected number of events.
Probability theory is applicable to all branches of science. Probability and the related field of statistics have long been used to predict the outcomes of events, whether the events are to occur in the future, or the events occurred in the past, but with still undetermined outcomes. In the past, probabilities were calculated by persons skilled in mathematics, using no tools to perform the calculations other than paper and pencil. Recently, the advent of computers has allowed probability and statistics to be used more widely than before because of the ease with which such calculations can now be performed. Recently, there has been much interest in automated systems and processes that predict the outcomes of events that are determined or influenced by chance.
However, the particular tasks to which probability theory is applied and the way it is applied are not ordinary problems to be solved. Of particular interest is the ability to calculate the probability that a predetermined outcome will occur among a plurality of randomly determined outcomes of a plurality of events. The probability that an event will result in a predetermined outcome can be expressed as a fraction or decimal value between 0 and 1, where 0 indicates no probability that the predetermined outcome will occur, and 1 indicates the opposite; i.e., 100% probability that the predetermined outcome will occur. For example, when a pair of dice is rolled the likelihood that the dice will land with the number four appearing on the top face of at least one of the dice can be calculated as a fraction relating the predetermined outcome to the set of all possible outcomes. For each die, since the number four is one of six different possible outcomes, the probability is ⅙, i.e., 0.167. However, since two dice are rolled, and each roll of a die is an independent event, the probability that a four appears on the top face of the second die is also ⅙, i.e., 0.167. When the rolls of the two dice are considered together, the probability of a four appearing on the top face of at least one of the dice is simply the added probabilities that a four will appear on each one of the dice, namely: P=0.167+0.167=0.333, which is equivalent to the fraction ⅓. On the other hand, if one desires instead to determine the probability that a four appears on the top faces of both dice when rolled, the problem now requires that the calculated probability of the four appearing on the first die, i.e., 0.167, be multiplied by the calculated probability that the four appears on the second die, i.e., 0.167, since it is desired to determine that subset of the outcomes in which both the first and second dice present the number four on the top face. Thus, the probability that the number four appears on the top faces of both of the dice when the pair of dice is rolled becomes 0.167×0.167=0.028, which is equivalent to the fraction 1/36.
Sometimes, some outcomes of an event occur with greater frequency than others. For example, among the various combinations of numbers which can occur upon rolling a pair of dice, the number seven occurs most frequently, because the number seven can be produced by the most number of combinations. Specifically, seven is produced by six combinations appearing on the dice, i.e., 1+6, 2+5, 3+4, 4+3, 5+2, and 6+1. However, other numbers occur less frequently on a roll of the dice because they are produced by only one or a few combinations. For example, the numbers two and twelve are produced only by the dice combinations 1+1, and 6+6, respectively.
Certainly, as the number of events increases and the number of different combinations of events increases that can produce a particular outcome, it becomes more difficult to estimate the likelihood of a desired result from a plurality of events whose outcomes are randomly determined. Particularly, with respect to events that are at least influenced by chance, e.g., results of an investment portfolio over a period of time, it would be desirable to indicate to a user the predicted results of a particular strategy, given assumptions concerning the chances of succeeding, i.e., an assessment of the investment risks.